June 2, 2020
Image: Patrick Feller, via Flickr
Good morning. This Tuesday, Amazon set a record for corporate borrowing costs, what the threats to delist Chinese firms actually mean, and a robot can do my job now. Want Index in your inbox each morning? Subscribe here.
As of 4:37 a.m. PDT: Nasdaq Futures: 0.44% | Euro 600: 1.55% | Nikkei: 1.19% | Hang Seng: 1.11%
It reflects a broader trend: Borrowing is now very, very cheap for tech companies. That's largely driven by central bank policies, but it's also because lenders view giant tech companies as being super safe.
Some tech companies have to pay more, though it's still not much.
It's notable that all these bonds are yielding significantly less than their coupon price: In other words, the cost of borrowing has gone down in recent years.
On Friday, President Trump said his administration would investigate U.S.-listed Chinese firms "with the goal of protecting American investors." That comes just after the Senate passed a bill that would delist Chinese companies unless the Public Company Accounting Oversight Board (PCAOB) is able to audit them.
But it's worth wondering what this achieves. For one, it might not hurt the companies forced to delist.
As for the Chinese economy, the move might help, not hurt, the country.
Whatever the outcome, don't expect change anytime soon. The new rules, if passed, would delist a company only if it refuses an audit for three years — and who knows what the world will look like then.
We all remember OpenAI's terrifyingly good GPT-2, the very, very powerful text-generating AI. Well, now there's GPT-3, an even more powerful text-generating AI. Page 28 of a new research paper shows examples of GPT-3 generated news articles that humans struggled to distinguish from real, journalist-written articles. It was nice knowing you!